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Tax Breaks

20-May-2015

Under new government measures to boost the economy, the $20,000 instant asset write-off has now been extended until end of June 2018. So what does it all mean?

What is the $20,000 Instant Asset Write-off?

“All small businesses will get an immediate tax deduction for any individual assets they buy costing less than $20,000.”
  • The 100% tax deduction applies to any item used for running the business.
  • The $20,000 limit applies to each individual item purchased. There is no limit to how many items can be claimed by a business within this period.
  • Purchases made between 7:30pm May 12th 2015 and June 30th 2018 can be claimed.

What equipment is covered?

  • Any asset or equipment used for running the business.

Who is eligible?

  • Small businesses with an annual turnover of less than $2 million

What is the purpose of the new generous small business tax deductions?

  • To encourage small businesses to invest in assets
  • Boost the economy
  • Increase opportunity and productivity for small businesses
  • Improve cash flow and bring forward investment

What about items over $20,000?

  • More expensive items may still be eligible for the normal small business depreciation arrangement.
  • Small businesses also receive a tax cut of 1.5 percent (down to 28.5%) which is the lowest rate for small businesses in 50 years meaning more disposable funds for investment.

* Please consult with your tax agent or accountant to ensure you are making an informed decision. Further information is available from ATO website.


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